CMS Takes Positive Step Forward in Addressing Prior Authorization Wait Times and Denials

Vencetia Flournoy, NARHC Intern and Sarah Hohman, Director of Government Affairs

Background
On January 17th, the Centers for Medicare & Medicaid Services (CMS) published a final rule designed to reform Medicare Advantage (MA) and other federally regulated health insurers’ prior authorization guidelines. While there is still more to be done, this is significant progress in the ongoing fight to increase transparency and timeliness for patients and providers.

The CMS rule sets regulations for Medicare Advantage organizations, Medicaid and the Children’s Health Insurance Program (CHIP) fee-for-service (FFS) programs, Medicaid managed care plans, CHIP managed care entities, and issuers of Qualified Health Plans (QHPs) through FFEs. Aimed at reducing barriers to care and improving patient-provider communication, CMS intends to “streamline the prior authorization process.”

What CMS Finalized
There are three primary guidelines that influence prior authorization processes for the above payers, and these beneficial changes will go into effect January 1, 2026.

First, payers are now required to send authorization decisions within 72 hours for urgent requests and within 7 days for standard, non-urgent requests. One survey by the AMA shows that 94% of providers reported a delay in care for patients. This new timeline requirement is a great advancement in cutting out unnecessary wait times for providers to administer medical care.

Next, payers must submit a reason for a delay in response to a request. Along with this, they must also now submit a specific reason for denying coverage when a request is refused. A study from the HHS in 2018 found that after an appeal, Medicare Advantage Organizations eventually approved 75% of denied requests. This revision will work to increase oversight of these denials and increase access to necessary services for patients.

Finally, payers must also now submit a report of prior authorization metrics. These reports must be posted publicly on their websites before January 1, 2026. This reform will assist stakeholders in better understanding prior authorization processes and increase legitimacy of denials. Increased transparency is hoped to improve provider experience and patient wellbeing.

CMS also used this rule to finalize a proposal for a new electronic prior authorization method for MIPS eligible clinicians and eligible CAHs and hospitals, set to begin January 1, 2027. In addition, these Application Programming Interfaces (APIs) will have information about patient history in relation to prior authorization and will house data related to individual claims and encounters. This API implementation is intended to improve long-term communication between payers, patients, and providers. CMS writes “We encourage using these standards-based APIs for purposes beyond our requirements to improve the interoperability of health data, regardless of the use case.”

NARHC recognizes the challenges that rural providers are facing with many of these payers and is pleased to see CMS beginning to address these important issues.

More Information on the Ruling
You can find more information and details on the CMS website linked here, or from the CMS factsheet regarding the final rule available to view here.

Thoughts on the final rule or other questions? Please contact Sarah Hohman, NARHC Director of Government Affairs at Sarah.Hohman@narhc.org.